New Economics Papers
on Agricultural Economics
Issue of 2006‒01‒01
nineteen papers chosen by

  1. U.S. Proposal for WTO Agriculture Negotiations: Its Impact on U.S. and World Agriculture By Fabiosa, Jacinto F.; Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Fuller, Frank H.; Hart, Chad E.; Matthey, Holger; Tokgoz, Simla; Yu, Tun-Hsiang; FAPRI, U Missouri Columbia; Wailes, Eric
  2. Efficiency, subsidies and environmental adaptation of animal farming under CAP. By Carlos San Juan Mesonada; Stefan Sperlich; Carmen Murillo; Werner Kleinhans
  3. Coasian payments for agricultural external benefits - an empirical cross-section analysis By Franz Hackl; Martin Halla; Gerald J Pruckner
  4. A Cointegration Analysis of the Long-Run Supply Response of Spanish Agriculture to the Common Agricultural Policy. By Jose Mendez; Ricardo Mora; Carlos San Juan Mesonada
  5. Trade Protection Measures, Agricultural and Food Prices By Ugur Ciplak; Eray M. Yucel
  6. How Costly is it for Poor Farmers to Lift Themselves out of Subsistence? By Olivier Cadot; Laure Dutoit; Marcelo Olarreaga
  7. Trade costs, export development, and poverty in Rwanda By Asarkaya, Yakup; Brenton, Paul; Diop, Ndiame
  8. Behavioral Incentives, Equilibrium Endemic Disease, and Health Management Policy for Farmed Animals By Hennessy, David A.
  9. Reactions of Spanish Agricultural Co-operatives to Globalization By Francisco Entrena Durán; Eduardo Mayano Estrada
  10. Market Information and Price Instability : An Insight into Vegetable Markets in Senegal By Hélène David-Benz; Idrissa Wade; Johny Egg
  11. The Generational Divide in Support for Environmental Policies: European Evidence By Joni Hersch; W. Kip Viscusi
  12. Assessing Consumers’ Valuation of Cosmetically Damaged Apples Using a Mixed Probit Model By Yue, Chengyan; Jensen, Helen H.; Mueller, Daren S.; Nonnecke, Gail R.; Gleason, Mark L.
  13. Buying Organic Food in France : Shopping Habits and Trust By Lucie Sirieix; Brigitte Schaer
  14. Routines and Communities of Practice in Public Environmental Procurement Processes By Katarina, Larsson; Svane, Örjan
  15. Disclosure of environmental violations and the stock market in the Republic of Korea By Mamingi, Nlandu; Laplante, Benoit; Jong Ho Hong; Dasgupta, Susmita
  16. Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity By Shin-Yi Chou; Inas Rashad; Michael Grossman
  17. Quantifying the rural-urban gradient in Latin America and the Caribbean By Thom as, Timothy S.; Buys, Piet; Chomitz, Kenneth M.
  19. Impact of BSE and Bird Flu on Consumersf Meat Demand in Japan By Takashi Ishida; Noriko Ishikawa; Mototsugu Fukushige

  1. By: Fabiosa, Jacinto F.; Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Fuller, Frank H.; Hart, Chad E.; Matthey, Holger; Tokgoz, Simla; Yu, Tun-Hsiang; FAPRI, U Missouri Columbia; Wailes, Eric
    Abstract: Senator Chambliss, chair of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, asked the Food and Agricultural Policy Research Institute (FAPRI) to analyze the latest U.S. proposal to the Doha round of WTO negotiations (see Appendix 1, U.S. Proposal for WTO Agriculture Negotiations, USTR, October 10, 2005). While the U.S. proposal provides many concrete steps to reduce farm support and trade distortions, it does not provide all necessary information for quantitative analysis of the proposal. FAPRI, through consultations with economists and staffers of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, Office of the United States Trade Representative, and U.S. Department of Agriculture, elaborated a complementary set of policy assumptions to carry the quantitative analysis. The analysis is conducted in deviation from the baseline of the FAPRI 2005 U.S. and World Agricultural Outlook. New policies put in place since the 2005 baseline was established have been accommodated to separate the impact of the policy scenario from the full set of policy assumptions.
    Keywords: WTO, Doha, trade reform, domestic support, market access
    JEL: F1
    Date: 2005–12–15
  2. By: Carlos San Juan Mesonada (Universidad Carlos III de Madrid); Stefan Sperlich (Universidad Carlos III de Madrid); Carmen Murillo (Universidad de Cantabria); Werner Kleinhans (Federal Agricultural Research Centre, Braunschweig)
    Abstract: The purpose of this paper is to model the interaction between the targets of the current CAP: environmental adaptation, subsidies and efficiency the of animal farming. To this end we first have to identify the production frontier and relative efficiency level for each animal oriented type of farm in the sample. The production frontier and efficiency index for each type of farm (assuming no specific production functions) are identified using DEA techniques. We then address the relationship between relative efficiency, farm size and environmentally friendly behavior realizing a non parametric regression of efficiency on economic size, a proxy for the degree of environmental appropriateness, and regional dummies. Calculations of the efficiency of the farms including direct subsidies, are compared with the counterfactual exercise in the case where direct subsidies are not considered. Finally, we look for relations between subsidies and factors such as farm size, efficiency and environmentally friendly behavior. One key result shows that on average absolute direct payments generally tend to increase efficiency. However, in most of the cases the mean efficiency decreases as the percentage of direct payments rises. Direct payments are found to be positively related to environmentally friendly production, at least in Germany. However, in general, the direct payment system is not sufficient to offset the fact that the less environmentally friendly farms as well as the larger ones are more efficient.
    Keywords: Efficiency, subsidies, DEA, non-parametric regression, ecological farming, natural resources, agricultural productivity.
    JEL: P Q Z
    Date: 2005–12–23
  3. By: Franz Hackl (Department of Economics, Johannes Kepler University Linz, Austria); Martin Halla (Department of Economics, Johannes Kepler University Linz, Austria); Gerald J Pruckner (Department of Economics and Statistics, University of Innsbruck, Austria)
    Abstract: This paper deals with a cross section analysis of local compensation payments to farmers for their provision of landscape amenities in alpine tourist communities. These payments can be interpreted as the outcomes of Coasian negotiations. Based on Austrian data we empirically identify the underlying determinants of the negotiating process. The probability for a positive negotiation outcome depends on politico-economic factors such as municipal revenues per resident and the share of votes for distinct parties in parliamentary elections. Whereas benefits associated with landscape amenities also play an important role transaction costs of bargaining are of minor relevance. If the variety of the countryside seems to be endangered tourist communities start compensating their farmers for landscape-enhancing activities. Local subsidy schemes supplement European Union and national policies in support of rural areas as they internalize positive agricultural externalities.
    Keywords: Coase Theorem; Coasian payments; external benefits of agriculture; landscape-enhancing agricultural services
    JEL: Q1 Q26 D62
    Date: 2005–12
  4. By: Jose Mendez (Arizona State University); Ricardo Mora (Universidad Carlos III de Madrid); Carlos San Juan Mesonada (Universidad Carlos III de Madrid)
    Abstract: Using cointegration techniques, we estimate two models that capture the long-term relationship between Spanish prices and agricultural production. The models were estimated over Spanish agricultural data from 1970 to 2000, a period spanning Spain’s implementation of the Common Agricultural Policy in 1986 and the application of the MacSharry Reforms in 1992. The models, as well as plausible counterfactual scenarios constructed to assess the production changes induced by the CAP, lead to three principal results. First, we find that Spanish agricultural output is responsive to agricultural prices. Second, we find that the MacSharry reforms have been instrumental in restraining agricultural production. Third, we find that Spanish agricultural output would have been higher if Spain had not applied the CAP. These results are important and have broad implications. First, they strengthen the position of those reformers both within and outside of Europe that argue for lower price supports as an appropriate policy for stemming European agricultural surpluses. Second, they indicate that recent EU reforms, which have in effect extended the MacSharry reforms, are appropriate measures for curbing European agricultural surpluses.
    Keywords: Keywords: Price Support Policy; MacSharry Reforms; Cointegration Techniques; European Economic Integration.
    JEL: Q11 Q18 C32 F02
    Date: 2005–12–23
  5. By: Ugur Ciplak; Eray M. Yucel
  6. By: Olivier Cadot; Laure Dutoit; Marcelo Olarreaga
    Abstract: The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar's farmers. The analysis is based on a simple asset-return model of occupational choice. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large |somewhere between 124 and 153 percent of a subsistence farmer's annual production. Our results make it possible to identify farm characteristics likely to generatee large gains if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.
    Keywords: threshold regression; switching regression; unknown sample separation; Madagascar; subsistence; entry costs
    JEL: F10 O12 O19
    Date: 2005–11
  7. By: Asarkaya, Yakup; Brenton, Paul; Diop, Ndiame
    Abstract: For Rwanda, one of the poorest countries in the world, trade offers the most effective route for substantial poverty reduction. But the poor in Rwanda, most of whom are subsistence farmers in rural areas, are currently disconnected from markets and commercial activities by extremely high transport costs and by severe constraints on their ability to shift out of subsistence farming. The constraints include lack of access to credit and lack of access to information on the skills and techniques required to produce commercial crops. The paper is based on informatio n from the household survey and a recent diagnostic study of constraints to trade in Rwanda. It provides a number of indicative simulations that show the potential for substantial reductions in poverty from initiatives that reduce trade costs, enhance the quality of exportable goods, and facilitate movement out of subsistence into commercial activities.
    Keywords: Crops & Crop Management Systems,Rural Poverty Reduction,Rural Development Knowledge & Information Systems,Economic Theory & Research,Poverty Monitoring & Analysis
    Date: 2005–12–01
  8. By: Hennessy, David A.
    Abstract: We develop a dynamic capital valuation model in which each farm can take an action with farm-varying cost to increase the probability of not contracting a disease. In the presence of infection externalities, circumstances are identified under which multiple equilibria exist and where the one involving the most extensive set of action takers is socially optimal. It is suggested that costly capital markets are one factor in determining the extent of endemic disease in a region. The introduction of frictions, such as dealing with a cumbersome veterinary public health bureaucracy, can enhance social welfare by encouraging precautionary biosecurity actions. Some technical innovations can reduce social welfare. The model is also extended to study a voluntary herd depopulation scheme. Moral hazard in the biosecurity action will dampen the scheme’s welfare effect.
    Keywords: biosecurity, continuous time, multiple equilibria, Nash behavior, reinfection.
    Date: 2005–12–21
  9. By: Francisco Entrena Durán; Eduardo Mayano Estrada
    Abstract: The main objective of this article is to build up a typology of the ideological discourses which guide and legitimize the different, and often mutually contradictory, reactions of Spanish agricultural co?operatives to the processes of ever?increasing socio?economic globalization in which they are immersed. In accordance with this typology, in which we have followed a criterion similar to Max Weber's, we distinguish four ideal ideological discourse types. These go along a continuum from those which stress a more or less egalitarian mutualism, which has traditionally characterized co?operatives, to those which tend to look towards efficiency and managerial competitiveness. Although it focuses on the situation occurring in Spain, the analysis strategy adopted in the present work could be applied to the study of the reactions of agricultural co?operatives in other countries in similar socio?economic circumstances.
    Date: 2005
  10. By: Hélène David-Benz (CIRAD ; CA ; Montpellier, France); Idrissa Wade (INRA ; UMR MOISA ; Montpellier, France); Johny Egg (INRA ; UMR MOISA ; Montpellier, France)
    Abstract: Market gardening has been increasing fast in Senegal. But farmers face high marketing risks: daily price fluctuations exceed an average 20% for some products, seasonality is strong, anticipation based on prices leads to cyclic movements. Farmers and market operators have found various forms of coordination to manage uncertainty. “Coxers” are specifically dedicated to information gathering, either in rural or wholesale urban markets or to transport negotiation. Paid per unit handled, they limit their own risk, whereas they reduce uncertainty for their partners. In other cases, interlinked transactions permit to provide inputs to producers despite the deficient credit market; meanwhile, it secures merchants access to product. As it is the case in many other countries, information provided by MIS is of little help to Senegalese market gardeners. The updated and more targeted access to information through MANOBI services allows producers to improve their negotiation capacity. But it does not modify the existing coordination features, given that they are not only determined by needs in information (but also by social links, access to credit, payment modalities, transport facilities…).
    Keywords: Horticulture, Price analysis, Market instability, Information, Transaction costs
    JEL: D23 D82 O17 Q13
    Date: 2005–12–19
  11. By: Joni Hersch; W. Kip Viscusi
    Abstract: This article examines age variations in support for environmental protection policies that affect climate change using a sample of over 14,000 respondents to a 1999 Eurobarometer survey. There is a steady decline with age in whether respondents are willing to incur higher gasoline prices to protect the environment. This relationship remains after controlling for socioeconomic characteristics. There are age-related differences in information about environmental risks, information sources about the environment, perceived health risks from climate change, and degree of worry about climate change. However, taking these factors into account does not eliminate the age variation in willingness to pay more for gasoline to protect the environment.
    JEL: Q25 H23
    Date: 2005–12
  12. By: Yue, Chengyan; Jensen, Helen H.; Mueller, Daren S.; Nonnecke, Gail R.; Gleason, Mark L.
    Abstract: A mixed probit model was applied to survey data to analyze consumers’ willingness to buy apples with cosmetic damage caused by the sooty blotch and flyspeck (SBFS) disease complex. The analysis finds consumers will pay a premium for organic production methods and for apples with low amounts of SBFS damage. Behavioral variables such as experience in growing fruit significantly affect the willingness to buy apples of different damage levels. Consumers’ tolerance of very blemished apples is limited and they trade off production technology attributes for cosmetic appearance. Better understanding of this trade-off is important to organic producers’ decisions about disease control.
    Keywords: apples, sooty blotch and flyspeck, organic, cosmetic damage, willingness to buy, mixed probit model.
    Date: 2005–12–28
  13. By: Lucie Sirieix (Agro.M ; UMR MOISA ; Montpellier, France); Brigitte Schaer (Ecozept ; Montpellier, France)
    Abstract: In this paper we attempt to compare the responses of consumers and professionals to questions related to organic food retailing, in order to highlight the differences and the similarities of viewpoints between them and to understand the links between consumer perception of organic food and the sales channel. In order to do this, we analyse the results of three studies, two of them conducted with consumers, the third one with professionals. The first study deals with the links between consumer trust orientations and the frequentation of the different sales channels where organic food can be found. The results of this study conducted in France and Germany show that consumers in organic food stores put trust in their store but are neither the heaviest nor the most trusting consumers. Consumers in hypermarkets or supermarkets do not really trust the store, and only really trust the label. In the second study, respondents were asked what their preferred outlet for organic products would be and why. Results show that organic food consumers like being something more than an anonymous consumer when shopping. They seem to appreciate markets particularly, and appear to attach no particular value to organic food stores, nor to the acknowledged greater convenience of shopping in supermarkets. This study also raises interesting questions relating to the experience of purchasing in terms of shop image and atmosphere, and factors that contribute to consumer trust in organic foods. The third study is based upon two surveys (autumn 2003 and autumn 2004) among organic food stores in France, on market development and on actors’ perception of their situation and their customers. According to shopkeepers, customers of organic food stores are looking more for quality and competence, than for attractive prices, and attach more and more value to traceability and trustworthiness. This paper both shows important similarities and differences of viewpoints between consumers and organic food stores shopkeepers, and gives researchers and professionals a better insight into the links between consumer perception of organic food and the sales channel.
    Keywords: Organic food, consumer behaviour, sales channel, trust
    JEL: P Q Z
    Date: 2005–12–19
  14. By: Katarina, Larsson (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Svane, Örjan (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Environmental procurement has received increasing attention as a policy tool promoting change towards sustainable consumption and production. The successful implementation of public environmental procurement policy requires the establishment of new routines for user-producer-supplier relationships that enable the integration of environmental aspects. The aim of the study is to analyse the roles of different communities of practice and learning patterns in environmental procurement processes. Building on experiences from the procurement of ecological food and sustainable construction in Stockholm, the paper identifies learning patterns and codes of practice when environmental criteria are introduced into existing routines for economic and technical specifications in public procurement processes.
    Keywords: Public environmental procurement; routines and codes of practice; procedural and declarative knowledge; vertical and horizontal learning; City of Stockholm
    JEL: D83 Q28 Q55
    Date: 2005–12–28
  15. By: Mamingi, Nlandu; Laplante, Benoit; Jong Ho Hong; Dasgupta, Susmita
    Abstract: For almost 20 years, the Ministry of Environment of the Republic of Korea has published on a monthly basis a list of enterprises that fail to comply with national environmental laws and regulations. In this paper, the authors examine the reaction of investors to the publication of these lists and show that enterprises appearing on these lists have experienced a significant decline in their market valuation. Firms in developing countries are often said to have no incentives to invest in pollution control because they typically face weak monitoring and enforcement of environmental regulations. The findings of the authors, however, indicate that the inability of formal institutions to control pollution through fines and penalties may not be as serious an impediment to pollution control as is generally argued. Environmental regulators in developing countries could harness market forces by introducing structured programs to release firm-specific information about environmental performance.
    Keywords: Pollution Management & Control,Health Economics & Finance,Environmental Economics & Policies,Water and Industry,Decentralization,Environmental Economics & Policies,Energy and Environment,Health Economics & Finance,Access to Markets,Markets and Market Access
    Date: 2004–06–01
  16. By: Shin-Yi Chou; Inas Rashad; Michael Grossman
    Abstract: Childhood obesity around the world, and particularly in the United States, is an escalating problem that is especially detrimental as its effects carry on into adulthood. In this paper we employ the 1979 Child-Young Adult National Longitudinal Survey of Youth and the 1997 National Longitudinal Survey of Youth to estimate the effects of fast-food restaurant advertising on children and adolescents being overweight. The advertising measure used is the number of hours of spot television fast-food restaurant advertising messages seen per week. Our results indicate that a ban on these advertisements would reduce the number of overweight children ages 3-11 in a fixed population by 10 percent and would reduce the number of overweight adolescents ages 12-18 by 12 percent. The elimination of the tax deductibility of this type of advertising would produce smaller declines of between 3 and 5 percent in these outcomes but would impose lower costs on children and adults who consume fast food in moderation because positive information about restaurants that supply this type of food would not be banned completely from television.
    JEL: I10 I12
    Date: 2005–12
  17. By: Thom as, Timothy S.; Buys, Piet; Chomitz, Kenneth M.
    Abstract: This paper addresses the deceptively simple question: What is the rural population of Latin America and the Caribbean (LAC)? It argues that rurality is a gradient, not a dichotomy, and nominates two dimensions to that gradient: population density and remoteness from large metropolitan areas. It uses geographically referenced population data (from the Gridded Population of the World, version 3) to tabulate the distribution of populations in Latin America and in individual countries by population density and by remoteness. It finds that the popular perception of Latin America as a 75 percent urban continent is misleading. Official census criteria, though inconsistent between countries, tend to classify as " urban " small settlements of less than 2,000 people. Many of these settlements are however embedded in an agriculturally based countryside. The paper finds that about 13 percent of Latin America populations live at ultra-low densities of less than 20 per square kilometer. Essentially these people are more than an hour ' s distance from a large city, and more than half live more than four hours ' distance. A quarter of the population of Latin America is estimated to live at densities below 50, again essentially all of them more than an hour ' s distance from a large city. Almost half (46 pecent) of Latin America live at population densities below 150 (a conventional threshold for urban areas), and more than 90 percent of this group is at least an hour ' s distance from a city; about one-third of them (18 percent of the total) are more than four hours distance from a large city.
    Keywords: Agricultural Resear ch,Demographics,Health Indicators,,Health Information & Communications Technologies
    Date: 2005–06–01
  18. By: Tony Guida (Université de Savoie); Olivier Matringe (UNCTAD)
    Abstract: This paper examines the forecasting performance of GARCH’s models used with agricultural commodities data. We compare different possible sources of forecasting improvement, using various statistical distributions and models. We have chosen to confine our analysis on four indices which are the cocoa LIFFE continuous futures, the cocoa NYBOT continuous futures, the coffee NYBOT continuous futures and the CAC 40, the French major stock index. As one may see the sample of indices is containing a genuine stock index also. The implied goal is to find out if the GARCH models are more fitted for stock indices than for agricultural commodities. The forecasts and the predictive power are evaluated using traditional methods such as the coefficient of determination in the regression of the true variance on the predicted one. We find that agricultural commodities time series could not be used with the same methodology than the financial series. Moreover it is interesting to point out that no real “model leader” was found in this sample of commodities. Finally increased forecast performance is not solely observed using non-gaussian distribution in commodities.
    Keywords: GARCH, commodities, volatility, forecasting, risk management
    JEL: C13 C32 C53 G15
    Date: 2005–12–20
  19. By: Takashi Ishida (Graduate School of Economics and Business Administration, Hokkaido University); Noriko Ishikawa (Graduate School of Science and Technology, Kobe University); Mototsugu Fukushige (Graduate School of Economics, Osaka University)
    Abstract: This paper investigates the impacts of the BSE and Bird Flu on consumersf meat demand in Japan using the Almost Ideal demand system. BSE and Bird Flu scares bring about a fall in demand for beef and chicken respectively, and an upturn in demand for pork and fishery products, both of which are substitutes for beef and chicken in Japan. We also find that a Bird Flu outbreak has a negative impact on the market share for beef, although a BSE outbreak raises consumer demand for chicken. Empirical results also show that both impacts do not persist permanently, but remain for a period that might depend on the characteristics of the disease, such as incubation period, cure rate and infection risk, and on the differences in the government response to the particular disease crises.
    Keywords: BSE, Bird Flu, Almost Ideal demand system, Meat Demand
    JEL: D12 Q13 L66
    Date: 2006–01

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